BANGKOK, Apr 21 (Reuters): The Bank of Thailand may leave its key interest rate unchanged on Wednesday, after it cut rates twice to support growth since political unrest hit Bangkok in November, a Reuters poll found.
All but one of 18 economists expect the monetary policy committee to keep the one-day repurchase rate steady at 2.0 per cent, a level last seen in December 2010. One estimated a 25 basis-point cut.
A majority of economists saw no further easing for the rest of the year after cuts in March and late November, by a quarter of a point each, to help Southeast Asia's second-largest economy cope with the fallout from the political turmoil.
Months of sometimes violent anti-government protests have hurt domestic demand and tourism, and delayed public works, leaving the central bank under pressure to do more to support the economy, which may have contracted in the first quarter.
Analysts who see no change on Wednesday said the current rate should be sufficiently supportive for growth.
"The BOT is likely to remain tilted towards the dovish side in its policy statement but we think they may refrain from cutting interest rates further for now," said Gundy Cahyadi, economist with DBS Bank in Singapore.
"The central bank would want to wait and see, until there is a clearer sign of impact from the previous rate cuts, which we broadly think to be rather ineffective should there be no conclusion to the current political deadlock," he added.
Economist Bernard Aw with Forecast Pte in Singapore said that while Wednesday's decision could be another close call, he expected the rate to stay on hold. "This will allow more time for the March rate cut to work through the financial system," he added.
At the last meeting on March 12, the vote to cut the rate was a close 4-3, with three members opting for no change and arguing that the current rate was already supportive.
The seven-member committee comprises four central bank officials, including the governor, and four outside experts.
Central bank Governor Prasarn Trairatvorakul said on April 1 that monetary policy would remain accommodative but he felt even any big rate cuts would not help the economy much amid the unrest and that it could be a waste of "ammunition" because the problems were not financial in nature.
The crisis sent consumer confidence to a more than 12-year low while high household debt is also weighing on consumption.
The central bank recently cut its economic growth estimate again to 2.7 per cent for this year from January's forecast of around 3 per cent and October's projection of 4.8 per cent. In 2013, the economy expanded 2.9 per cent.
However, senior economist Nuchjarin Panarode with Capital Nomura Securities in Bangkok, said a further rate cut was possible to buffer slowing growth at a time there is no fully-functioning government, while inflation is tame.
